Meituan-Dianping, the global fourth most valuable startup, has launched its flash purchase platform on Wednesday, offering an under 30 minutes, non-stop, delivery services 24-hours a day. Supermarket purchases like fresh fruits & vegetable and fresh flowers & plants are some examples of the items that can be delivered with this new platform.
This is the online-to-offline platform startup’s attempt at stepping up the game in the realm of the ‘new retail for fresh produce‘ battle against the likes of Alibaba’s Hema stores and JD’s 7Fresh stores, where consumers get the convenience of delivery services even for perishable goods under 30-minutes within the constrained radius of three kilometres for Hema stores and five kilometres for 7Fresh stores.
Wang Haozhong, SVP of Meituan-Dianping, sees this move as a way to meet the upgrade of consumer demand for quicker and more convenient services alongside improvement of the living standards of the Chinese that can be extended outside the ‘food and beverage’ area. He also sees the potential for growth in fresh food delivery as the fresh food sector is still at low levels even as the main categories of e-commerce are already experiencing a slowdown.
Currently, this new service that integrates with its food & drinks delivery platform is available across 2,500 Chinese cities and counties. Meituan’s merchant partners get to select the most suitable distribution methods from Meituan’s distribution system to achieve a 30 minutes average delivery time. While most for the riders on-board are not full-time staff, the company claims to have 530,000 riders on standby to meet the demand.
This addition of service is not new for a company like Meituan who has evolved very quickly from its humble beginnings where it started first with Groupon-like group buys only. It has since expanded into food delivery, ride-hailing, hotel booking, movie tickets, short-term rental and now even into the fresh food delivery sector.
It is likely that this flash purchase service will lead to a fiercer battle with China’s e-commerce giant Alibaba. The fight is no longer just in movie ticketing against Taopiaopiao and food delivery with Alibaba’s Ele.me but also against Alibaba’s Hema stores.
Having said that, it’s pertinent to highlight Meituan’s foray into fresh food sector is but a natural next step to cement Meituan’s growing dominance in the delivery sector. After all, its food-and-beverage business segment has grown phenomenally, acquiring up to 51.9 per cent of the Chinese market, and turning gross profits from -124 per cent in 2015 to 8 per cent this quarter.
Its imminent IPO at the Hong Kong bourse might be the ‘solution’ that Meituan is after, to provide the funding for its head-on fights with the other giants like Ctrip, Alibaba, and Didi to achieve its elusive goal of becoming China’s super app.